Should You Buy Range Resources Corp. (RRC)?

Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow over 700 of the best-performing investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Range Resources Corp. (NYSE:RRC), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Range Resources Corp. (NYSE:RRC) was in 46 hedge funds’ portfolios at the end of September. RRC investors should be aware of an increase in enthusiasm from smart money, as there had been 39 hedge funds in our database with RRC positions at the end of the previous quarter. However, the level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as AMERCO (NASDAQ:UHAL), Cadence Design Systems Inc (NASDAQ:CDNS), and New York Community Bancorp, Inc. (NYSE:NYCB) to gather more data points.

Follow Range Resources Corp (NYSE:RRC)

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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Keeping this in mind, let’s check out the key action encompassing Range Resources Corp. (NYSE:RRC).

Hedge fund activity in Range Resources Corp. (NYSE:RRC)

Heading into the fourth quarter of 2016, 46 funds tracked by Insider Monkey were long this stock, up by 18% from the second quarter of 2016. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).

HedgeFundSentimentChart

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Andreas Halvorsen’s Viking Global has the largest position in Range Resources Corp. (NYSE:RRC), worth close to $381.1 million, comprising 1.6% of its total 13F portfolio. Sitting at the No. 2 spot is Stelliam Investment Management, led by Ross Margolies, which holds a $121.6 million position; the fund has 4.1% of its 13F portfolio invested in the stock. Other peers that are bullish consist of John Griffin’s Blue Ridge Capital, Israel Englander’s Millennium Management, and Ken Griffin’s Citadel Investment Group.

Now, specific money managers have jumped into Range Resources Corp. (NYSE:RRC) headfirst. Partner Fund Management, managed by Christopher James, created the biggest position in Range Resources Corp. (NYSE:RRC). Partner Fund Management had $54.7 million invested in the company at the end of the quarter. Thomas E. Claugus’ GMT Capital also initiated a $48.5 million position during the quarter. The other funds with new positions in the stock are Wayne Cooperman’s Cobalt Capital Management, David Zusman’s Talara Capital Management, and D. E. Shaw’s D E Shaw.

Let’s now review hedge fund activity in other stocks similar to Range Resources Corp. (NYSE:RRC). These stocks are AMERCO (NASDAQ:UHAL), Cadence Design Systems Inc (NASDAQ:CDNS), New York Community Bancorp, Inc. (NYSE:NYCB), and Icahn Enterprises LP (NASDAQ:IEP). All of these stocks’ market caps match RRC’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
UHAL 22 340676 -1
CDNS 26 611713 -3
NYCB 15 200787 0
IEP 4 6591251 -2

As you can see these stocks had an average of 17 funds with bullish positions and the average amount invested in these stocks was $1.94 billion. That figure was $1.20 billion in RRC’s case. Cadence Design Systems Inc (NASDAQ:CDNS) is the most popular stock in this table. On the other hand Icahn Enterprises LP (NASDAQ:IEP) is the least popular one with only four bullish hedge fund positions. Compared to these stocks Range Resources Corp. (NYSE:RRC) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.